Cash-rich Kanoria Chemicals & Industries has acquired 90 per cent stake in Switzerland-based APAG Holdings AG for CHF 6.39 million or $6.97 million. The transaction, which also includes a loan of CHF 1.3 million ($1.42 million), will mark the company’s entry into the automotive component business.

The deal comes after Kanoria Chemicals & Industries sold its chloro chemicals division to Aditya Birla Chemicals (ABCIL), a subsidiary of the metals giant Hindalco Industries, for Rs 830 crore ($190 million), in 2011. Avendus Capital was the advisor to Kanoria Chemicals on the transaction.

Shares of Kanoria Chemicals closed at Rs 33.3 a unit on the BSE on Friday, up 0.45 per cent.

APAG Holdings, through its subsidiary APAG Elektronik AG, is involved in the development and sale of electronic and mechatronic modules and control devices for the automotive, consumer goods, power tool electronics and building automation industries. Its designing and engineering facility is in Switzerland while the manufacturing facility is located in the Czech Republic.

“After the disinvestment of our chloro chemicals business in May 2011, Kanoria Chemicals has been exploring diversification in knowledge-based high growth areas. APAG is known for its acumen in product designing and engineering, and is a reliable partner to the high-end automotive segment in Europe,” said RV Kanoria, chairman and managing director of the firm.

After the sale of its chloro chemicals business, Kanoria was left with its organic chemicals division. It also owns an Ankleshwar-based unit in Gujarat, which manufactures alcohol and alcohol-based intermediates, and another unit in Vishakhapatnam which is engaged in manufacturing formaldehyde and hexamine.